US among countries eyeing 1.6m tonnes of G2G rice deals

Economy April 10, 2014 00:00

By PETCHANET PRATRUANGKRAI
THE N

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THE UNITED STATES and other countries are interested in purchasing rice from Thailand under government-to-government contracts, for a combined volume of more than 1.6 million tonnes, says the Foreign Trade Department.

Moreover, the Commerce Ministry reported yesterday that eight local rice traders had joined the ministry’s general auction in Suphan Buri province for 169,000 tonnes, while 15 traders also joined bidding through the Agricultural Futures Exchange of Thailand (Afet).

Surasak Riangkrul, director-general of the ministry’s Foreign Trade Department, said it was negotiating with the US on a G2G rice contract.

“If the negotiations succeed, Thailand may be able to sell about a million tonnes of rice to the US, one of the world’s biggest rice-trading markets. Also, many other countries have negotiated with Thailand for purchase of about 600,000 tonnes of rice from the government,” he said.

He did not say which kind of rice the US was interested in purchasing. Last year, it imported 382,300 tonnes of rice from Thailand. In January this year, it imported 35,060 tonnes, down by 8.79 per cent year on year. According to the Thai Rice Traders Association, the price of 100-per-cent Thai white rice is currently quoted at US$403 a tonne, while the US rice is traded at $605 a tonne.

Surasak said that with many potential contracts for sale of rice from the government stocks, it should be able to reduce its stockpiles while earning money to return to the Finance Ministry under the pledging scheme on time.

Rice exports to Iraq ‘soon’

Thailand should soon be able to resume exports of rice to Iraq after that country banned imports of Thai rice three years ago. Thai exporters should also be able to join the upcoming bidding for 800,000 tonnes of rice opened by the Philippine government and win some contracts, he added.

As of the end of March, the ministry reported that it could return Bt216 billion from rice sales to the Finance Ministry.

Moreover, as of last Friday, the ministry was able to return Bt10.7 billion of the Bt20 billion that had been allocated from the central budget to pay farmers under the rice-pledging scheme. Caretaker Deputy Commerce Minister Yanyong Phuangrach said the ministry should be able to return the whole Bt20 billion by the end of May.

To ensure rice quality, the ministry yesterday opened warehouses in Suphan Buri for the media’s inspection. A representative from China’s state-owned enterprise COFCO also observed the warehouses.

Somchart Soithong, director-general of the Internal Trade Department, said more rice buyers had joined the Afet auction of 260,000 tonnes of rice. The proposed price was better than at previous auctions, showing that market demand is up amid a lower supply from the second harvest season.

Somchart said that after the end of the main harvest season in February, less rice had entered the market, while the second crop is expected to produce less than 8 million tonnes of paddy rice. With the lower supply amid rising demand in the world market, coinciding with a lower price for Thai rice, the country should be able to sell its stocks for reasonable sums, he said.

Meanwhile, Yanyong testified yesterday to the National Anti-Corruption Commission (NACC) that caretaker Prime Minister Yingluck Shinawatra had not been negligent in preventing corruption in the rice-pledging programme but had found it necessary to keep the Pheu Thai Party’s election promise of setting the pledging price at Bt15,000 a tonne to increase farmers’ incomes.

The NACC is prosecuting Yingluck over her role in large losses that the programme has allegedly caused.

Yanyong was one of 11 witnesses that Yingluck had named, but was one of only three ministers that the NACC allowed to testify on her behalf. The others are caretaker Commerce Minister Niwatthumrong Boonsongpaisan, who will testify today, and caretaker Finance Minister Kittiratt Na-Ranong, who has postponed his testimony as he is attending a World Bank meeting in Washington, DC. Yanyong told the NACC that the rice-pledging scheme had been implemented under the Constitution Act. After the programme was established, the price of Thai rice had increased continuously compared with 10 years ago.

He said Yingluck could not suspend or cancel the project after it had been declared to Parliament.

Also, he claimed that despite the allegations of corruption and huge losses under the project, there was no clear evidence of such malfeasance as no authorised agencies had finalised the project’s budget yet.